Key Tronic Corporation reported a significant decline in financial performance for the fiscal year ending June 27, 2026, with net sales of $386.7 million, a decrease of 17.4% from $467.9 million in the previous fiscal year. The company experienced a net loss of $47.8 million, or $4.41 per share, compared to a net loss of $8.3 million, or $0.77 per share, in fiscal 2025. The revenue drop was attributed to reduced demand from legacy programs and uncertainties in the global economy, which affected credit availability and liquidity across the electronics manufacturing services industry.
In response to these challenges, Key Tronic has undertaken strategic initiatives to strengthen its competitive position. The company successfully exited its manufacturing operations in China and expanded production capacity in its facilities in Arkansas and Vietnam. Notably, the Vietnam facility's manufacturing footprint was doubled to support anticipated growth in high-value programs, particularly in medical devices. Additionally, a new technology and research center was opened in Arkansas, which is expected to enhance engineering support and collaboration with customers.
Operationally, Key Tronic's customer base remains concentrated, with the five largest customers accounting for 39% of total net sales in fiscal 2026, down from 48% in fiscal 2025. The company aims to diversify its customer portfolio by securing new programs across various industries, including medical devices, industrial equipment, and data processing. As of June 27, 2026, the company had an order backlog valued at approximately $204.1 million, an increase from $159.1 million the previous year, indicating potential future revenue growth.
The company reported a gross profit margin of 6.2% for fiscal 2026, down from 7.8% in the prior year, primarily due to revenue reductions and restructuring charges. Operating income as a percentage of net sales was negative 3.8%, compared to a slight positive margin in fiscal 2025. Key Tronic's balance sheet remains strong, with a current ratio of 2.1 and a debt-to-equity ratio of 1.54, indicating sufficient liquidity for future operations. The company anticipates that ongoing tariff-related concerns and global logistics issues will continue to influence its operations, but it remains optimistic about long-term growth prospects as it adapts to evolving market conditions.
About KEY TRONIC CORP
Key Tronic Corporation is a contract manufacturer specializing in electronic and mechanical product assembly, design engineering, and precision manufacturing. Serving diverse industries worldwide, it offers services including PCB assembly, plastic molding, sheet metal fabrication, and full product integration. With a global footprint in the U.S., Mexico, China, and Vietnam, the company emphasizes innovation, responsiveness, and cost efficiency to deliver tailored manufacturing solutions and support customer product development.
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